Property Investment 101: FOMO, I know. FOBO?
We know FOMO, I think?
Fear of Missing Out. That fear that we face when we see everyone is buying, surely I better not be missing out. An example? There were the days when I was in a property sales gallery (at least 10 years ago) and I was looking at a unit and after discussing with my wife, I told the sales person that I was ready to go ahead. The sales person says let me get you the form.
As soon as he said so, another sales person near to him said that the unit I was after was just booked. WOW. A difference of a mere seconds. The whole sales gallery was buzzing with people talking and deciding. Really a room full of people with FOMO thoughts. Those were the days and I do not see those days thus far even if the number of property transactions have shown some increase while the overhang numbers have been dropping.
What is FOBO then?
FOBO means Fear of Better Offer. Yes, this is also my first time of hearing such a term. Do read the article here which was the first time I have come across this term. Article in afr.com While this term is new, I do have many friends who have shown to me this FOBO term in action.
First is a friend with a Master Degree Holder and holding a super high position in a US MNC and surely can afford to buy more properties than me, if he wanted. He said, “are you sure you want to buy properties now? The prices have jumped too much. I think when the whole market collapses, there will be a lot of great deals.” He is still waiting for the next financial crisis to invest into a property. I hope his wish does not come true, I do not wish to have another financial crisis. I am also not sure if both him and I would still keep our job if there’s a financial crisis.
Second is a friend with an Engineering degree. This friend is somewhat snobbish and once upon a time angered my wife because he mentioned proudly that he is working in a MNC while my wife is just working in a local company which was not even listed at the time. I was also working in a local company at the time too. Haha.
Anyway long story but this was what he said, “I saw many units of the project you bought, price also still good, at RM295k.” I told him that RM295k is a very very good price because there’s no way I will sell at RM295k. He said, he will take his time to choose… coz there were many units available. Few weeks later, when I asked him, he said, “Oh… After I called a few of the agents, all the RM295k is the same unit. The unit is also above the water pump. So sometimes can hear some noise.” He did not manage to buy.
The story did not end there. Many years later, I wanted to sell my unit for around RM640k. I asked if he was interested and if he was interested, I could give him a friend price. He did NOT respond for weeks. Anyway, I sold off my unit very quickly after that to a father who bought the unit in cash. Many more weeks later, somehow we met somewhere and first thing he asked was how was my unit? I told him it was sold and he said, “oh… I was interested and wanted to view but I was busy…” In my heart, I am like, “Hahahahaha.”
I think my friend thought that I would reduce my offer. I did not. Anyway, always note that FOMO is bad but FOBO is just as bad yeah. Truth is, if we understand the market well enough, we would not have the FOBO attitude. The only reason for both FOMO and FOBO is because we do not know what we are investing, we do not know if it represents good value and we just fear of making a bad decision. This was my message yesterday at a public talk.
“If we do not know anything about what we are investing into, that’s not investing, that’s called gambling or speculating.” Do not simply call everything as investing because investing means you know what you are investing. Cheers.
Please feel free to share this article too. Sign up for daily investment news updates (FREE since Nov 2013 and FOREVER).
Alternatively, Follow me on Telegram here.
Please LIKE kopiandproperty.com FB page to get daily updates about the property market beyond kopiandproperty.com articles.
